Welcome competition: eBay marketer Steve Brennen
The arrival of Amazon as a etail presence in Australia will push local retailers and marketers to improve the customer experience, according to some of Australia’s leading marketers.
Recent rumours have suggested global giant Amazon will come to the market one the government’s laws to hit goods coming in from overseas with GST.
eBay’s chief marketing officer Steve Brennen told the Retail Marketing Summit he welcomed the increased competition for the auction site, but was curious about what business model it may employ.
“I am fascinated about what model they will play,” he added. “Everywhere else it’s a logistics business, with things like next day delivery; it’s about efficiency. Here, there’s a huge distance between cities and logistics is a real challenge.
“Already 20% of online traffic from Australian shoppers goes to Amazon today – whether you go to a .com.au site or .com site, it doesn’t really matter, one in five shoppers buys from Amazon already, they’re here already.”
Asked about the potential impact Amazon might have on the market on a later panel Sandy Mellis, general manager of Reckitt Benckiser, said consumers were suffering at the moment with sub-par online retail because they were not yet being exposed to world’s best practice.
“The reason Australia is pretty ordinary is because no one has come in and said ‘it has to be better’,” said Mellis.
“Competition and someone setting the bar is what is going to change the game.”
‘Amazon is formidable’: John Batistich
John Batistich, director of marketing at Scentre Group, parent of Westfield Shopping Centres, said that Amazon was going to have an impact on the way local retailers operated.
“Amazon is formidable, it just registered $100b worth of sales, it has an incredible business of growth,” said Batistich.
“What it’s doing is they acquiring customers and there is a lot of conversation around its ability to sustain the high cost of delivery it’s generating.
“Amazon are advanced around data, it leads the market in that space, it will have an impact in this marketplace – the question is how sustainable that is.
“Amazon plays by different rules to many of the retailers in this region. It has wonderful capital reserves, massive technical investments – the question is: is that going to be sustainable?”
Tara Lordsmith, former general manager of marketing at Myer, said that online was mixed in terms of what it was actually delivering.
“It’s the omni-channel play, which is actually what works, and at Myer we were certainly looking at ways we could combine the two together.
“We had more visitors to our website than we actually do to our stores, but the conversion rate was absolutely ridiculously low, and it still is today for a whole heap of different reasons.”
However, Reckitt’s Mellis warned that traditional retailers and marketers taking on the etailers needed to make sure they had all their channels in place.
“I think it’s not either-or, it’s about balanced strategy. It’s about how are you managing your channel conflicts? People are going on Amazon to understand a product, but they are part of the channel strategy.”